Correlation Between Indus Realty and Big Yellow
Can any of the company-specific risk be diversified away by investing in both Indus Realty and Big Yellow at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Indus Realty and Big Yellow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indus Realty Trust and Big Yellow Group, you can compare the effects of market volatilities on Indus Realty and Big Yellow and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Indus Realty with a short position of Big Yellow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indus Realty and Big Yellow.
Diversification Opportunities for Indus Realty and Big Yellow
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Indus and Big is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Indus Realty Trust and Big Yellow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Yellow Group and Indus Realty is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Indus Realty Trust are associated (or correlated) with Big Yellow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Yellow Group has no effect on the direction of Indus Realty i.e., Indus Realty and Big Yellow go up and down completely randomly.
Pair Corralation between Indus Realty and Big Yellow
Given the investment horizon of 90 days Indus Realty is expected to generate 1.67 times less return on investment than Big Yellow. But when comparing it to its historical volatility, Indus Realty Trust is 5.62 times less risky than Big Yellow. It trades about 0.07 of its potential returns per unit of risk. Big Yellow Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,270 in Big Yellow Group on September 3, 2024 and sell it today you would earn a total of 105.00 from holding Big Yellow Group or generate 8.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.57% |
| Values | Daily Returns |
Indus Realty Trust vs. Big Yellow Group
Performance |
| Timeline |
| Indus Realty Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Big Yellow Group |
Indus Realty and Big Yellow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indus Realty and Big Yellow
The main advantage of trading using opposite Indus Realty and Big Yellow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indus Realty position performs unexpectedly, Big Yellow can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Big Yellow will offset losses from the drop in Big Yellow's long position.| Indus Realty vs. Plymouth Industrial REIT | Indus Realty vs. First Industrial Realty | Indus Realty vs. Terreno Realty | Indus Realty vs. Rexford Industrial Realty |
| Big Yellow vs. Terreno Realty | Big Yellow vs. LXP Industrial Trust | Big Yellow vs. Rexford Industrial Realty | Big Yellow vs. First Industrial Realty |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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